Bank of America and Merrill Lynch & Co. are in merger discussions, according to people familiar with the matter.
Details of the terms under discussion weren't immediately clear, but Merrill was believed to be asking for a price that would value the firm at well above $40 billion. Merrill's stock came under pressure last week as concerns about Lehman Brothers Holdings Inc. fanned worries about its own health. Merrill's shares dropped 36% in the week, cutting $15 billion off of its market value. As of Friday, the firm was worth $26 billion.